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If you are seeking investment help, look at thevideo here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at http://www.rwinvestmentstrategies.com.If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Saturday, December 21, 2013

I last reported on bond ETF performance on 7/7. Here is an update on the performance of funds I follow based on Morningstar performance data.

Allocating the fixed income portion of invested assets has been a challenge, to put it mildly, for investors over the past few years. Not long ago, investors could put the bulk of fixed income assets in an index fund tracking the Barclay's Aggregate Index and then go to thinking about the stock portion of assets. Not true in 2013 and not true as we look ahead to 2014.

As you can see, the returns vary
widely and the funds are quite different. For what it's worth, you'll
find that most 401(k)s do not offer a decent selection of bond funds -
you are forced to select from a couple. On the other hand, if you have
an IRA, you have the selection available below as well as many others -
another reason on the side of rolling over 401(k)s.

In general, you want to limit, to the extent it makes sense, the bond exposure of your investable assets in your taxable accounts where they will get hit with your marginal tax rate as ordinary income.

Generally, as you can see in the table, the shorter duration or shorter maturity
funds performed best as would be expected in a rising yield environment where the yield curve steepens.
This impact can be seen by comparing IEI (-2.57%) versus IEF (-5.75%).
The table also shows the poor performance of emerging markets and
international in general.

The bogey in the bond market is AGG, the Barclay's Aggregate Bond Index -
it is to the bond market what the S&P 500 is to stocks.

Disclosure: this post is for educational purposes. Individuals should
do their own research or consult a professional before making financial
transactions.

I've managed investment assets for institutions and individuals for more than 30 years and have seen first hand the egregious fees charged for sub par performance. My mission is to show individuals how to avoid these fees and capture the long term performance of the markets. In doing this I consult on an hourly basis, manage assets for a short period to get investors set up to manage on their own and manage assets outright at less than half the going rate.
I am a fee only registered investment advisor. I receive no commissions or any type of payment other than what my clients pay me.